(AP) Republicans are taking aim at Senate legislation overhauling the financial system, saying lack of controls on giant government-sponsored mortgage finance firms is a major flaw.

In the weekly Republican radio and Internet address, the

Senate's top Banking Committee Republican singles out Fannie Mae and Freddie Mac as being "left unscathed." Alabama Sen. Richard Shelby says the two firms helped create a demand for risky loans and inflated the housing bubble.

Fannie Mae and Freddie Mac buy mortgages from lenders and package them into bonds that are resold to global investors.

A GOP amendment to the financial overhaul legislation would require the government to give up control of Fannie and Freddie within two years and take steps to get out of the business of mortgage finance.

Shelby said, "This week, Republicans stood with America’s small-business owners and offered a rational alternative that strengthens consumer protections without burdening Main Street with unnecessary regulations." 

Democrats unanimously rejected that amendment.

Shelby also criticized the bill's consumer protection provisions as overreaching.

The Senate will begin voting again Tuesday on amendments to the bill. Despite a three-day workweek next week, Senate Majority Leader Harry Reid has repeatedly said the bill must be finished by the end of the week.

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WYMT Mountain News
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